2024-05-04 03:30:47
The government is going to take an initiative to gradually reduce borrowing from savings certificates to zero for budget expenditure. According to sources in the Ministry of Finance, which can start from the next fiscal year 2024-2025.
According to sources, the government is going to take this decision mainly on the condition of reducing interest expenses and International Monetary Fund (IMF). As a result, the amount of borrowing from this sector is expected to be reduced in the next financial year. In the current fiscal year 2023-2024, the target of borrowing from savings bonds is Tk 18 thousand crores. It is estimated to be reduced to 16 thousand crores in the next financial year 2024-2025.
When asked about borrowing from savings certificates, an official of the finance department said that government loans from savings certificates are very expensive loans. The highest interest here is above 12 percent. Hence, over the years the loan from savings has been consistently reduced. For this reason, various conditions have been imposed on the purchase of savings certificates by the government. For example, if anyone wants to invest in this sector above five lakh rupees, he must file a tax return. That’s why many people are not investing in this sector. At the same time, many investors are breaking savings bonds as the cost of living increases due to inflation. They are spending this money on family work. As a result, the sale of saving paper has decreased a lot. He said that the government should also reduce the amount of borrowing from savings bonds to comply with the loan conditions of the International Monetary Fund. We want to reduce the borrowing from this to zero in the next few years.
According to the latest data of Bangladesh Bank, the negative amount of net sale of savings bonds has increased to Tk 8 thousand 892 crore in the first eight months (July-February) of the current financial year 2023-24. In the same period of the previous financial year 2022-2023, the amount of net sales was negative 3 thousand 510 crores. Going negative means that the government no longer has to borrow from savings bonds. As a result, the government does not have to pay interest on loans in this sector. However, the government still has to allocate a large sum of money in the budget against paying interest on savings bonds sold earlier. For example, 40 thousand 20 crores have been allocated in the current financial year.
Common people are no longer interested in investing in savings bonds because inflation leaves them with no money left to save. According to the data of Bangladesh Bureau of Statistics (BBS), inflation in the country was 9.81 percent last March. After rising above 9 percent in March last year, it has not fallen below 9 percent in any month. That is, inflation has been above 9 percent for 13 months. Inflation is now believed to be close to 20 percent as private.
And those who have surplus money are investing in banking sector instead of investing in savings bonds. Many private banks are offering 10 to 11 percent profit this year. Investors are taking advantage of this opportunity. And ‘smart’ investors tend to invest in government treasury bills and bonds. Here the interest rate is between 11 and a half to 12 percent.
According to the statistics of Bangladesh Bank, the accumulated debt of the government in April 2023 by selling savings bonds was 3 lakh 60 thousand 500 crores. In this April, the amount of this loan increased by only 214 crores to 3 lakh 60 thousand 714 crores.
In the last fiscal year 2021-2022, a total of 1 lakh 8 thousand crore rupees of different types of savings bonds were sold. Out of this, 88 thousand 154 crores were paid to the customers for principal (investment) and profit (interest). At the end of the fiscal year, after the interest-principal payment of the savings bonds sold, the government’s net sales in this sector was Tk 19,915,750,000, which is 52.44 percent less than the previous fiscal year. The net sales amount in the financial year 2020-2021 was Tk 41 thousand 959 crores.
In the budget of the fiscal year 2021-2022, the government had set a target of borrowing 32 thousand crore rupees from savings bonds. As it can be seen, the government took 37.50 percent less loan from this sector than the target in the last financial year. A total of Tk 1 lakh 12 thousand 188 crore 24 lakh savings bonds were sold in this financial year. Out of this, Tk 70 thousand 229 crores was paid to the customers for the interest-principal of the savings bonds sold earlier. According to that, the net sales amount was 41 thousand 960 crores. Earlier in the fiscal year 2019-2020, the government had taken a loan of Tk 14 thousand 428 crores from savings certificates. In the history of Bangladesh, the government took the largest loan from savings bonds in the fiscal year 2016-2017, Tk 52 thousand 417 crores.